The sluggish economy is pushing Electronic Arts to grab the hatchet and remove any underperforming extremities.

Disappointing holiday game sales are yet again putting EA in a position to embark on another round of job cuts. The videogame publisher anticipates net revenues for the 2009 fiscal year will fall below previous expectations. As a result, EA will be scaling back the number of releases in the coming year. Staffing and infrastructure will be reduced accordingly.

"While we saw significant improvement in the overall quality of our key products this year, we are disappointed that our holiday slate is not meeting our sales expectations," said EA CEO John Riccitiello. "Given this performance and the uncertain economic environment, we are taking steps to reduce our cost structure and improve the profitability of our business."

This fall, the publisher already laid off 500 to 600 employees, and there's no telling how many folks will be let go as a result of the impending cutbacks or what games will be put on the chopping block. While EA didn't indicate which of its holiday titles were underperforming sales-wise, Riccitiello did say he was pleased with Dead Space, Warhammer Online: Age of Reckoning, Spore, and Mirror's Edge - signifying sequels will likely see the light of day. Despite cuts, EA is also planning several new titles in the coming year.

Speaking in an investor call, Electronic Arts CEO, John Riccitiello, discussed the company's lower than expected sales during 2008.

"While we saw significant improvement in the overall quality of our key products this year, that quality has not yet translated into enough sales," he said. "So far in calendar 08 we have shipped 17 titles with Metacritic scores of 80 or above versus seven this time last year. Quality is a prerequisite for a great selling game - but it is not the entire equation."

"We did manage to put quality and innovation on the board, and we're very proud of that. Many times, what happens with a new intellectual property is the first edition doesn't generate the units that subsequent editions can generate, and I would argue that in this particular year the consumer might have more reticent to take risk than they might otherwise be, in a very crowded Holiday."

"So I think we've established the value for EA, and the value in our franchises, and these are things we can build on in the future."

"We're very pleased with a lot of our new franchises this year," he added. "We think Spore has established a strong base for being an ongoing franchise, we think the same of MySims, Dead Space looks like a long term big winner for us. We expect Warhammer will continue to perform very, very well, it's life measured in multiples of years not multiples of months."

"Mirror's Edge is one that was very strongly reviewed. That one's going to go forward; we'll probably be looking at some issues around the design to make sure that a strong IP is married to a strong business."

To increase profitability, EA decided to cut down its games portfolio and lay off staff in 2009.

Poor, poor EA employees. The Sims 3 seems to be heading down the toilet too, why can't EA realize that all its CD protections actually don't stop pirates and stop the whole SecuROM business. Who seriously guides EA to continue to use SecuROM? It is the most obvious blunder of gaming in a very long time.